Strategic Expansion Overview

Raj Rayon Industries Limited announced Board approval for Phase II expansion involving investment of Rs. 650 crore at its existing Silvassa facility. The expansion will add 300 TPD polyester yarn capacity and 50 TPD recycled polyester yarn capacity, with full commissioning targeted for CY2028. FY29 is expected to be the first full year of commercialisation.

Capacity and Revenue Projections

  • Total additional capacity: 350 TPD (300 TPD polyester yarn + 50 TPD recycled polyester yarn)
  • Annual revenue potential: Rs. 2,700–3,000 crore at peak utilisation
  • Brownfield expansion leveraging existing land, utilities, and evacuation infrastructure
  • Expected lower capital cost per ton and shorter execution timeline compared to greenfield project

Value-Added Product Portfolio Expansion

  • Entry into fabrics with approximately 10 TPD capacity targeted to commence in Q3 FY27
  • Doubling of Value-Added Dope-Dyed Yarn (DDY) capacity targeted for Q3 FY27
  • Entry into recycled polyester yarns (50 TPD) and technical textiles
  • Value-added, specialty and sustainable products expected to comprise approximately 80% of revenue at peak utilisation
  • Expansion into technical textiles including Industrial Denier Yarn (IDY) for geogrids, seat belts, agritech and industrial packaging
  • Production of bi-component yarns for premium suede-like fabrics used in garments, bags and furnishing
  • High-performance functional yarns with antibacterial, antimicrobial and permanent moisture-wicking properties

Recent Operational Improvements

  • De-bottlenecking and system upgradation completed in May 2026
  • Continuous polymerisation capacity increased from 350 TPD to 400 TPD
  • Achieved finer process control and lower specific fuel consumption
  • Executed during period of raw material volatility to minimise productive day loss

ESG Initiatives and Cost Optimization

  • Biomass heating system to be commissioned by December 2026 at capital outlay of Rs. 25 crore
  • Will eliminate approximately 23,000 kg per day of furnace oil consumption
  • Expected to lower cost of production by approximately 1-2%
  • Waste gases, vapours and flue gases to be recovered and recycled
  • Plan to meet close to 50% of electricity requirement through solar generation
  • Further expected reduction of approximately 1-2% in cost of production from solar integration

Recycled Polyester Segment Strategy

  • Recycled polyester yarns command 30–40% premium over conventional virgin yarns
  • 50 TPD facility will internalize requirement currently met by promoter group company SVG Fashions Private Limited
  • SVG has approximately two decades of experience in recycled textile manufacturing
  • SVG has recycled around 300 million PET bottles
  • SVG holds Global Recycled Standard (GRS) and OEKO-TEX certifications
  • SVG operates Intertek-certified testing laboratory
  • SVG products supplied to leading global sportswear and footwear brands

Management Commentary

Mr. Sandiip Satyanarayan Agarwwal, Whole-Time Director & CFO, stated: "The Phase II expansion marks another important milestone in Raj Rayon's transformation into a fully integrated manufacturer of value-added polyester products. Our strategy is not merely to add capacity, but to build a differentiated product portfolio with greater emphasis on recycled yarns, specialty products and technical textiles that offer superior growth opportunities and stronger profitability."

Financial Position

  • Company remained cash surplus throughout de-bottlenecking exercise
  • Leverage remains low
  • Positioned to fund Phase II without straining the balance sheet

Risk Factors

  • Forward-looking statements subject to numerous risks and uncertainties
  • Expansion subject to receipt of statutory, regulatory and corporate approvals
  • Funding subject to availability of financing on acceptable terms
  • Timelines and outcomes subject to prevailing market conditions